Oil Down as COVID-19 Concerns Continue to Dampen Fuel Demand Outlook

© Reuters.

(Bloomberg) — Oil was steady in Asia after OPEC said a planned coordinated release of reserves may swell a crude surplus expected early next year.

Futures in New York traded near $78 a barrel after closing little changed on Wednesday. The projection was made by the group’s advisory body — the Economic Commission Board — ahead of an OPEC+ meeting next week. Some of the cartel’s delegates warned this week that releasing strategic reserves may lead to the alliance holding back crude supply in January.

Crude had fallen over the past month as President Joe Biden agitated for a response to rising energy prices, but the landmark plan announced Tuesday fell short of expectations and saw prices rise. Attention is now turning to how OPEC+ will respond to the move by the U.S. and other major consumers. 

See also: Asia’s Oil Refining Renaissance Is Grinding Into Reverse Gear

The OPEC advisory body predicted that the excess in global markets would expand by 1.1 million barrels a day in January and February to 2.3 million and 3.7 million a day, respectively, if 66 million barrels are injected by the major consuming nations over the two-month period, according to a document obtained by Bloomberg.

stockpiles, meanwhile, rose by 1 million barrels last week, the fourth weekly increase in five, according to data from the Energy Information Administration. Inventories at the key storage hub of Cushing, Oklahoma, expanded for a second week. 

©2021 Bloomberg L.P.

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